Sees Arab Riots Influencing British Attitude in Holy Land

“Immigration and Labor in Palestine” is the subject of an article by Sir Andrew McFadyean in Foreign Affairs for July. It is a comprehensive review of the subject written by a former secretary to the Reparation Commission, 1922-24, and to the Dawes Committee, 1925, and Commissioner of Controlled Revenues, Berlin, 1924-30.

“Palestine is a most interesting international phenomenon,” writes Sir Andrew. “For one thing,-it is the last colonial land—and the only land to be colonized since the world became more or less set in its new industrial form. Further, it is populated by two races of unequal numerical strength and governed by a third, appointed by the League of Nations and therefore in the position of world trustee, which has little direct interest but overwhelming indirect interest in the country’s orderly administration and #eaceful development.

“DEVELOPMENT SLOW”

“Palestine is a small country— about the size of Wales — with about one million inhabitants of whom roughly three-quarters are Arab and one-quarter Jewish. Its natural resources are very limited, and its economic development will necessarily be slow—inevitably too slow to satisfy either the perfer-vidum, ingenium of the minority of its inhabitants, or sympathies of those of us outside Palestine who would be glad to see the country absorbing larger numbers for whom many parts of Europe have become prisons of cruelty and humiliation. A country of its size and character cannot support a sudden and unlimited influx of new inhabitants; the urgency of the external Jewish problem merely accentuates the necessity for controlling immigration. But plainly if the terms of the mandate are to be observed the maximum number possible must be allowed entry, and the formula devised to meet the situation is contained in the principle that immigration will be permitted within the limits of the economic absorptive capacity of the country.

TREATS UNEMPLOYMENT

“The formula is an elastic one; there are no tests by which the absorptive capacity of a country can be exactly computed. Can a better criterion be chosen than the varying shortage or excess of labor available? If we adopt it, however, we have not automatically disposed of all our difficulties. When there is great unemployment, immigration will certainly be stopped for the time being. This must not be taken as an acceptance of the view that the existence of a considerable number of unemployed is a clear indication of excess immigration; it is easy to imagine circumstances in which unemployment might be caused by a shortage of immigration, and could only be decreased by an increase in the flow.

“However that may be, it may be regarded as certain that unemployment would be considered by the administration as a danger signal calling for a restriction of immigration, even if there were plausible grounds for supposing that unemployment had been caused by a precedent restriction; we may be satisfied if the administration will adopt the converse of that attitude and allow greater freedom of immigration when the labor demand exceeds the supply.

REVEALS LABOR SHORTAGE

“That the administration does not whole-heartedly adopt this view is evident from a consideration of the existing situation. What are the salient facts? First, that there was a large wave of immigration in 1933, {SPAN}###{/SPAN} by general prosperity in a time when the rest of the world had been in the doldrums. Secondly, that there is no Jewish unemployment, but a pronounced shortage of labor, evidenced by rising wages. Thirdly, that the administration has refused to admit for the moment more than a relatively small fraction of the immigrants for whom permits are demanded by the Jewish Agency.

“This situation is dangerous, politically and economically. Jews both inside and outside Palestine are tending to feel that the formula of economic absorptive capacity is being misinterpreted against them, at a time when Jewish difficulties are such as to command the sympathy of all humane persons. There may be difficult problems of administration in face of Arab unrest, but the situation will not be eased if Jewish unrest is created by what are considered to be concessions extorted by Arab opposition to the key principles of the mandate.

FEAR COMPETITION

“From the economic standpoint, a persisting shortage of labor will result in competition for the existing supply, which will drive wages, already high enough, up to a point at which existing enterprises will find it scarcely possible to make both ends meet, while new enterprises for which there is room will be definitely excluded. This process might continue until the present momentum had spent itself, when a general loss of confidence and slowing down of activity would ensue; there might be general unemployment, caused, if the above analysis is correct, by the administration’s restrictions—but accepted by the administration as a proof that they were right on economic grounds to restrict immigration. If unemployment supervenes when immigration is restricted, it is hard not to argue that unemployment would have attained even more serious dimensions if more people had been allowed in.

HITS ARAB AGITATORS

“What, so far as an outside observer can judge, are the considerations which have actuated the administration in determining its present policy? In the first place, the problem of law. and order does exist. There was a serious outbreak in 1929, which originated in a religious question, but was undoubtedly political in its real nature; it was accompanied by a serious loss of life. There was a minor outbreak, fresh in public recollection, towards the end of last year, for which Arab agitators were alone to blame and for which Jewish immigration was the pretext. It is for the administration to insure that there is no repetition of the events of 1929, and the responsibility is a heavy one. It is probably more keenly felt owing to the significant fact that the last outbreak is much more a demonstration against the authorities than against the Jews.

“This is not intended to imply that the authorities are more anxious about their own safety than about the safety of the Jewish population, which would be the reverse of the truth. It is impossible, however, not to believe that Arab violence directed specifically against the administration policy must tend to make that policy more conservative. But in any case there is force in the argument that Jewish interests will not be advanced, or not most quickly advanced, if the feelings of the Arabs inside and outside Palestine are inflamed to such a pitch that the maintenance of peace becomes impossible without the imposition of a regime of repression which would bring both mand###tory into discredit and put back the Jewish clock.

“That is perhaps the political background to the policy now being pursued by the authorities. From the economic standpoint, we may surmise that they are not unnaturally alarmed at the prosperity which they see around them; it seems too good to be true. We have so long been obsessed with the idea that the world is suffering from overpopulation—an idea which many of us believe to be entirely erroneous—that it is almost impossible not to have the feeling that the prosperity which Palestine has been enjoying as a direct result of the importation of labor and capital will be imperilled if that importation continues uninterruptedly. We are always tempted to think of such economic questions in terms of a static world; we minimize the extent to which an enlarged population, owing to its interchange of services as well as of commodities, tends to be self-supporting.

“And it is easy, and within limits true, to argue that the economic absorptive capacity of the country cannot be judged on the basis of immediate needs alone; in certain circumstances there might be a temporary need for more labor, the satisfaction of which would lead to a subsequent surplus.”